In the middle of 2007, Shai Agassi, a software multimillionaire turned environmental entrepreneur, was pondering how to make an electric car affordable to the average Joe. At that point, the all-electric vehicle—as opposed to electric-gasoline hybrids such as the Toyota Prius—was widely derided as impractical. General Motor’s EV1 had appeared in 1996 and, despite its cultlike following, the company stopped producing it after three years, saying the program was not commercially successful. The most advanced electric vehicle, the Tesla Roadster, was about to be released; it would travel some 200 miles on a fully charged battery, but at $109,000, the sleek sports car would be accessible only to the affluent; the company says about 1,200 of the vehicles are on the road. More affordable cars, at the time mostly in the planning stages, would be equipped with batteries averaging just 40 to 100 miles per charge. The power limitations had even spawned a new expression—“range anxiety,” the fear of being stranded with a dead battery miles from one’s destination.

From This Story

Visitors at a facility near Tel Aviv view a diagram of the Fluence Z.E. electric engine. Better Place vehicles are built by the French corporation Renault, which plans to sell 100,000 of the battery-powered cars in Denmark and Israel over the next five years.
(Ahikam Seri)

Shai Agassi, at a corporate facility outside Tel Aviv, founded a company whose name reflects his determination to improve the world.
(Ahikam Seri)

Agassi and Better Place have "the lead on everybody else," says one automobile analyst.
(Ahikam Seri)

The modern electric car proceeded by fits and starts in the U.S. market. The General Motors EV1 debuted in 1996, garnered fans, then ceased production after three years.
(Hal Garb / AFP / Getty Images)

The Nissan Leaf is due out in December 2010.
(Toru Yamanaka / AFP / Getty Images)

The Tesla Roadster goes from 0 to 60 mph in under four seconds and costs $109,000.
(Tesla Motors)

A real-world test of the Better Place concept got underway this past spring in Tokyo, where four taxicabs were put through their paces. This taxi parks over the gap in a battery-switching station.
(Better Place)

Beneath the car, an electric lift removes the spent 400-pound boxlike battery assembly, unloads it and installs a fresh one. The exchange takes three minutes, the company says.
(Better Place)

Experts are dubious, but Agassi envisions battery-switching stations across a broad swath of the United States.
(Ahikam Seri)

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Then, on a scouting trip to Tesla’s northern California plant, Agassi had an epiphany: “I scribbled down on a piece of paper, ‘batteries consumable. They’re like oil, not part of the car.’ That’s when it dawned on me—let’s make the batteries switchable.”

Two years later, in a cramped booth behind the exhibition hall at the Frankfurt Auto Show, Agassi was celebrating the payoff of that epiphany. The California company he founded, Better Place, had just announced its biggest deal yet: an agreement with Renault, the French car manufacturer, to produce 100,000 all-electric vehicles, or EVs, for sale in Israel and Denmark starting in 2010. Around the corner at the giant Renault exhibition, a garishly lit display showed a stylized version of one of Agassi’s “switching” stations in action: a robot with a steel claw extracted and replaced a model of a 600-pound battery from a cavity in the bottom of the vehicle in three minutes.

“We use the same technology that F-16 fighters use to load their bombs,” said Agassi, an Israeli-American, who got the inspiration from a pilot in the Israel Defense Forces.

If Agassi’s dream once seemed premature, concern about global warming, government pressure to produce zero-emissions vehicles, high oil prices and rapid improvements in lithium-ion batteries have begun to make electric vehicles look increasingly viable. By 2013, several models will have hit the road, including the Smart Fortwo, made by Daimler; the Nissan Leaf; the Mitsubishi i-MiEV; the Chevrolet Volt; and Tesla’s Model S.

Governments are trying to accelerate the shift away from fossil fuels. The Obama administration is providing $2.4 billion in research-and-development grants to electric car and battery manufacturers to improve vehicle battery technology. The Chinese have pledged to put half a million alternative-fuel cars on the road by 2011.

“In 2007 you could barely see an electric car” at the Frankfurt Auto Show, says Agassi, an intense 42-year-old, coolly elegant in a black tieless suit. “If you walked around talking about EVs, everybody assumed you were smoking something.”

Agassi’s business plan is unique among electric-car service providers. Others will make the vehicles. He will lease the batteries to car owners, and sell access to his switching and charging network. He expects to make his money selling miles, much as a cellphone-service provider sells minutes. Subscribers to Agassi’s plan would be entitled to pull into a roadside switching station for a battery change or to plug into a charging station, where dozens of other cars might also be hooked up, for an overnight or workday charge. Agassi estimates his customers will pay no more for battery power than they would spend on gasoline to travel the same distance. As business grows and costs fall, Agassi says, profits will soar. He says eventually he might give cars away, just as cellular-service providers offer free phones to customers with long-term contracts.

Agassi was born in a Tel Aviv suburb—his father is an electrical engineer and his mother a fashion designer—and he began programming computers at age 7. He has already had one hugely successful career. In his early 20s he founded a software company, TopTier, that helped corporations organize data; at age 33, he sold it to the German software giant SAP for $400 million. He later became SAP’s chief of technology. Flush with cash and looking for a new challenge, he turned to global warming. At a gathering of young leaders at the World Economic Forum in Davos, Switzerland, in 2005, Agassi and other attendees were asked, “How do you make the world a better place?”

The challenge, he recalled to me, was “to do something more meaningful than create a new version of software. How do you run a country without oil, on today’s state-of-the-shelf technology?”